Swiss teacher can buy an iPhone in days, Indian teacher needs months: Sridhar Vembu explains the gap

Zoho founder and chief scientist Sridhar Vembu on Tuesday expanded on his earlier comments about jobs in the AI era. He argued that the key to higher incomes lies in building deep technology capabilities rather than relying on welfare measures such as Universal Basic Income (UBI).

He used a comparison between Switzerland and India. "Why does a Swiss school teacher afford an iPhone in 2-4 days of income while an Indian school teacher needs to work 2-4 months for the same thing?" he asked in a long post on X.

"The answer in a nutshell: Switzerland has the deep tech capability to trade for iPhones made elsewhere on favorable terms and the Swiss political economy chooses to pay teachers well," he wrote.

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According to Vembu, technology capability is important not merely because of the jobs it directly creates but because it gives a country the "optionality" to shape its own political economy.

"If you have the deep tech capability in a region, the regional economy has the option of paying non-tech occupations like teachers, farmers, barbers...well," he said, adding that prosperity need not always be widely shared if a country's political economy is organised differently.

WARNING AGAINST DEPENDENCE

Vembu argued that countries without deep technology capabilities eventually become dependent on those that possess them.

"If a regional economy does not have the deep tech capability to exchange for the iPhone on favorable terms, the regional political economy has no option but to keep going into debt to the outside world," he said.

Ultimately, he added, the debt will be held by the deep tech capable regions and companies. "So they would give us all the tech, and we become indebted to them."

He cited Switzerland and Israel as examples of countries with relatively small populations that have built globally competitive technology capabilities.

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ALTERNATIVE TO UBI

Linking the argument back to the AI-driven jobs debate, Vembu said the answer was not Universal Basic Income but greater investment in research and development.

"The way we can avoid the UBI hell is to first develop deep tech capability in the region (lots of R&D), and then we create jobs in what I call 'Nature, Nurture, Culture and Scripture'," he wrote.

The tech veteran said wealth created through technology should be used to support better-paid teachers, farmers, nurses, artists, priests and counsellors, alongside investments in nature conservation, sustainable farming, healthcare and education.

"The option to decently pay these jobs exists only if the region can trade on favorable terms and that comes from deep tech capability," he said. "That is the long explanation of my thesis: Rural Development through Research and Development. "

Vembu said the R&D creates external balance and rural development creates internal harmony in society. "That is my economic thesis: Balance, Symmetry, Harmony and Contentment."

AI JOBS WARNING

On Sunday, Vembu warned that the software industry, including Zoho, had stopped creating significant numbers of new jobs as spending increasingly shifted towards AI infrastructure and data centres.

While saying AI was helping companies produce software faster, he questioned whether an already saturated global software market needed substantially more software.

The tech veteran also argued that manufacturing would create fewer jobs because of automation and raised concerns that the growing pressure for UBI would intensify unless economies found new ways to generate employment.